EurUsd EURUSD has nudged up against this week's 1.3380-85 highs again overnight, but ahead of this afternoon's critical ECB meeting the bulls lacked conviction to push for a break higher, and have instead settled back around 1.3330 levels. We think that the status quo will remain until the rate decision swings around but price action could easily remain erratic throughout the ensuing press conference. Should we get a surprise rate cut, watch for first supports to come into play at 1.3146 (4 Oct low), 1.3000 (major psychological support), 1.2962 (12 Jan low), 1.2874 (9 Jan low) and 1.2644 (10 Sep 2010 low). Even if the central bank doesn't cut, there enough speculators guessing they might that an unchanged rate decision could provide a knee jerk reaction higher. Nearest resistance is seen at 1.3384 (overnight high), followed by 1.3601 (30 Sep high), 1.3690 (28 Sep high) and 1.3799 (21 Sep high). We would prefer to fade rallies above 1.3500.
GbpUsd GBPUSD is stuck in a holding pattern ahead of today's important BoE meeting, with the pair trading in a relatively tight 1.5395 - 1.5495 range for the past 24 hours. There's plenty of speculation that a renewal of asset purchases may be on the cards, but thus far consensus remains for no change - for traders that means we could get a big move in either direction dependent on the outcome of that announcement. An increase in the asset purchase target from its current GBP200bn would be undoubtedly bearish, so watch for a sharp dip towards supports at 1.5328 (22 Sep low), 1.5297 (7 Sep low) and perhaps even as far as 1.5124 (21 Jul low). However, if no increase in the asset purchase target materializes, expect a strong bounce higher as short speculators get squeezed out. Nearest resistance levels are noted at 1.5495 (Tue's & Wed's highs), 1.5581 (Monday's high), 1.5666 (Friday's high), 1.5715 (29 Sep high), 1.5757 (19 Sep high), and 1.5821 (38.2% Fibonacci retracement of the sell-off 1.6618 to 1.5328).
UsdJpy USDJPY's small surge higher after the stronger US data yesterday managed to negate resistance at 77.00, but overall the price action has continued to be rather subdued. As such, the technical outlook remains largely unchanged from yesterday. The lower edge of the shallow uptrend channel is still not that far off at 76.50-55, so we are cautious that a break below that and Friday's lows (76.51) would herald the end of this modest bull run, and put us at risk of a return to the lows. Next supports are noted below at 76.34 (28 Sep low), 76.12 (21-22 Sep lows), and not far behind there is the all-time low 75.96 (set on 19 Aug). Nevertheless, until that downside break of 76.50 takes place, we maintain a mildly bullish bias, and are encouraged by the ample space overhead with limited resistance. Next levels on the topside are 77.30-40 (12 Sep US session high & 15 Sep high), 77.86 (9 Aug high), and 78.47 (8 Aug high).
UsdChf USDCHF is still grinding higher - helped in no small part by yesterday's better US data and this morning's higher than expected CPI. At the time of writing the pair looks to be threatening a break of 0.9285 resistance (6 Apr high), and with a 3-week uptrend channel still in play, our bullish bias remains intact. The next resistance levels above 0.9295 are noted at 0.9369 (9 Mar high), and 0.9506 (22 Feb high). Supports on the downside are much the same at 0.9149 (4 Oct low), 0.9081 (this week's low set on Monday), 0.8920-30 (27-28 Sep lows), 0.8856 (21 Sep low), 0.8791 (20 Sep low), and 0.8648 (15 Sep low).